The Future Of British Small Businesses In 2022

Recent reports from the Confederation of British Industry forecast a 5.1% growth for the upcoming year. Given the economic turbulence endured relative to pandemic management and navigating the UK’s departure from the European Union, businesses of all sizes are remaining hopeful for improved performance in the upcoming fiscal year. The looming challenge for many will be erratic supply chain and transportation costs that make accurately projecting future economic growth less certain.

The report has changed since June 2021 due to ongoing supply chain disruptions; social distancing applied to combat new viral variants would halve the potential growth rates. Some of the shift in projected growth is also due to the pending removal of the tax break provided to various industries during the pandemic as well as the shift in corporate tax from 19 to 25%. As consumer spending slowly recovers from pandemic-induced reductions, industries are hoping that this recovery can outpace increasing costs relative to shifting to pre-pandemic taxation policies.

Prospects for small businesses are just as unpredictable, though many small business owners are hopeful for the upcoming fiscal year. 36%  of small business owners were optimistic about their business’s prospects, while 31% were confident in their business’s ability to adapt to new conditions. The greatest growth prospects are projected for the fintech sector, with small enterprises including iZettle and Trustpilot continuing to receive investment capital while actively hiring and expanding operations. Further, many small businesses are projected to join the growing trend of investing in sustainability and automation  as a means of streamlining growth.

Challenges facing small businesses in the upcoming year include potential boycotts of businesses that refuse to accept cash and a lack of government grants to help cover start-up costs. Many small business owners have sought additional business interests to help cover costs, with roughly 31% of small business owners engaging in side hustles to provide extra cash.

While a variety of performance-enhancing tactics are being sought to improve small business performance during the upcoming year, ranging from improving networking, creating enhanced digital sales tactics and promoting workplace cohesiveness, many small businesses are seeking insurance to help cover costs. Needless to say, small business insurance can help a great deal. And there’s more good news: a 1.25% increase in small business insurance is projected to arrive in April 2022 to cover social welfare and healthcare costs.

Some have noted that the increase will add an added strain to small businesses already struggling to recover from pandemic-related costs and complications. Time will tell whether the increased business taxes and insurance rates will lead to healthier outcomes for the overall economy or will lead to a greater reduction in business growth for the long term.